MetroHealth Medical Center has received some scrutiny lately regarding top dollar consulting contracts.
Saturday, Metro released a letter explaining how staff restructuring has played a role in MetroHealth's financial turnaround over the past four years, which has helped to safeguard our mission of caring for all, regardless of ability to pay.
"Over the past four years, MetroHealth System executives have diligently pursued a restructuring program that helped create a $52.9 million turnaround, transforming the healthcare system's standing from a money-losing operation with a grim future to a solvent community asset. As part of this restructuring, MetroHealth adopted an industry-wide, accepted practice to provide more than 40 employees with transition contracts that were in lieu of severance payments.
The more than 40 contracts offered since July 2007 followed common practice within the healthcare industry, as validated by nationally recognized compensation advisor, Mercer. This allowed MetroHealth to meet the obligations of its mission to provide quality healthcare to all, regardless of their ability to pay, without going to the public for additional funding. In fact, MetroHealth's subsidy of $36 million is a $4 million reduction from 2010. And in 2010, MetroHealth provided more than 200,000 uncompensated care visits, an increase of 25% from 2008.
"Recently, some have voiced concern about some of these contracts, given their scope," said Mark Moran, President and Chief Executive Officer for The MetroHealth System. "This concern is understandable. We do not enter into these contracts lightly. But these agreements are consistent with recommendations by Mercer and are in line with standards of the healthcare industry."
MetroHealth set the benefits and duration of the agreements generally at or below the severance packages offered by comparable hospitals. "As is commonly accepted practice in corporate restructuring's, the short-term payments involved in such agreements will save MetroHealth money in the long-run, and make the operation more efficient," said Daniel Lewis, Chief Administrative Officer for The MetroHealth System. "They allowed us to ease the transition during a rapid time of change. Their future need will be evaluated on a situational basis."
After fulfilling a request for the contracts from County Councilman David Greenspan, MetroHealth officials decided to provide information about the contracts to the media, in the desire to operate with increased transparency.
"In order for MetroHealth to provide care for those who cannot afford to pay, we have to generate more revenue," Moran said. "The radical changes made in MetroHealth's structure included establishing new priorities. Meanwhile, the contracts give us many advantages such as an orderly transition process, ongoing access to staff and avoidance of potential litigation," Moran said.
MetroHealth is intent on attracting and retaining the best and brightest business and medical talent in the healthcare industry. "We operate in a competitive market," Moran said. "Adopting competitive practices requires us to take bold action in the best interest of MetroHealth on behalf of our community. Without eyes on the long-term benefits, we will continue to operate with increased transparency while being responsive to our patients and our mission."